Tag: Commercial Real Estate

The Lebanon Community Responds

I asked and the Lebanon City residents answered. In an earlier blog, Lebanon Paper Box: Day 40, I asked for feedback from the community of Lebanon on their ideas of what they would like to see incorporated in the the old Lebanon Paper Box building. Here is a recap of some of the responses that I have received so far. 

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It has been a little over a week since I published the blog post, Lebanon Paper Box: Day 40, and hit social media to solicit some suggestions and ideas about what the community would like to see at this predominant landmark in Lebanon City. The suggestions have been enlightening and has provided a glimpse of what is on the minds of the community, albeit only a small segment was sampled. I have received feedback from over 50 residents thus far.

Below is a consolidated recap of the suggestions that I have received. They are not listed in any particular order. Some of the ideas come as no surprise, while others were very unexpected…

  1. Homeless shelter
  2. Veteran shelter
  3. Roller skating rink
  4. Something tech related and interesting
  5. Recreation center
  6. Retail stores
  7. Apartment building with affordable housing
  8. Ballerina school
  9. Art gallery and studios
  10. Karate school
  11. Public clinic
  12. Go karts
  13. Something similar to the GoggleWorks in Reading
  14. Trampoline park
  15. Museum of the history of Lebanon
  16. Grocery store
  17. Skate park
  18. Chick-Fil-A
  19. Place for kids to play
  20. Community center
  21. Lebanon annex of the Spooky Nook Sports complex
  22. Connect with the Lebanon county Career and Technology Center during renovation
  23. Great location with a bike trail. I’d be so happy just to see it restored

A common thread, throughout a majority of the suggestions, is that Lebanon City is in need of community events and affordable things for residents to do. Primarily for the younger residents. It’s also clear to see that there is a lot of pride for the city and residents are passionate about providing programs for the homeless and our Veterans.

Based on all of this information, I have some research to do to better understand what programs already exist and where there may be some gaps to fill. Perhaps there are already some things in place that may require some public education, or perhaps not. Ultimately, the extent of feedback is motivating in that there is a community that cares. In time, there will be the a call for participation and action to help bring opportunities to fruition, this will be the true test of the community spirit.

The call for suggestions has not only spawned a list of ideas, but it has also created some dialogue between residents on the official Facebook page of the Lebanon Paper Box building. The conversations have been a mixture of constructive and destructive criticism. I have not been moderating the conversation as I want everyone’s voice to be heard. After all, criticism is a sign of doing something and making a contribution.

“To avoid criticism say nothing, do nothing, be nothing.”
– Aristotle

In the meantime, keep the ideas and suggestions coming! Also, give some thought to how some of these ideas can be accomplished though other initiatives. This is just one building in the City of Lebanon, but it can be a part of a bigger movement to help bring life into the surrounding community. This is bigger than one person or one building and it is going to require the effort of many.

If you want to become more involved in the Lebanon community, but don’t know where to start, feel free to reach out and I can help.

 

 

Sharing my Love for LED Light Bulbs

Never in my life would I have expected to get so excited about light bulbs!

It didn’t take me long after settlement on the Lebanon Paper Box warehouse to develop a passion for converting old ballast powered light strips to work with LED bulbs. Although there is a significant cost savings to switching over to LED, the primary motivation for me was to be able to see the building that I just purchased!

Over the years of prior ownership, all of the windows have been bricked over on the first floor and a majority of them have been bricked over on remaining floors. This was done to improve security since the building had previously been a target of vandalism in years past. The building is now locked up tight, but it is also awfully dark inside. I’m not quite ready to reopen the windows, so I needed to find another solution.

workshop light strip

Fluorescent Light Fixture

The lights that are in the building are of various ages. I’m not a lighting professional, but some are probably from the early iterations of fluorescent lights. The fixtures that are really old are salvageable, but I prefer to retire them when possible. Besides the fixtures being old and ballasts failing, fluorescent lights tend to mind the cold. The Lebanon Paper Box building does not have an HVAC system and it is often much colder inside the building than it is outside. The fluorescent lights take a while to start up in the bone chilling months of winter, and sometimes they just won’t turn on at all.

So between the failing ballasts and cold temperatures, converting the fixtures from fluorescent to LED was the most logical and economic option to solve my lighting issue. An expensive ballast replacement is not necessary when converting to LED and bypassing the need for a ballast. It took me a while to research how to retrofit a fluorescent light ballast to LED and I wasn’t sure which LED light bulbs to purchase. Most of the YouTube videos that I watched made the rewiring look easy since the fixture was laying on a table. It is actually pretty easy, but I was retrofitting the fixture while it was still hanging over my head. If possible, I highly recommend taking down the fixtures. It ends up being about 2000% easier. Also, if you’re not 100% sure what you are doing, speak with a certified electrician before attempting to do this yourself.

After a ton of research and trying multiple brands and styles of LED bulbs, for the 4′ fixture retrofits, I very highly recommend the Diva Light Plug and Play & Bypass Tube Lamp. I don’t get royalties for you clicking that link and purchasing the bulbs. I just love them that much! They are also very inexpensive compared to some of the other LED bulbs out there. I have spent as much as $30 for an LED bulb that performs no differently than this Diva bulb. I have also done a few 8′ fixture retrofits and have been very happy with this 8ft 40W LED (bypass) by GreenLightDepot.

One of the options that you will notice when choosing a light is the color. They typically range between 3000K – 6000K. The 3000K side of the spectrum is your typical office lighting scenario which is very similar to the traditional Soft White incandescent bulb. It is explained as a warm light that tends to have a bit of a yellow coloration. The 6000K end of the spectrum is a very bright, almost blueish, light. This level of light is supposed to be more along the lines of daylight. I have tried the different colors of light and prefer 5000K for my application.

Color Temperature Chart (Kelvin)

The afterthought of all of this for me is the cost savings. I have been able to cut the cost of energy for each light fixture by over 50%. In some cases, even more because one bulb is a sufficient light source in certain parts of the warehouse. Going from two fluorescent bulbs to one LED is over a 75% energy savings!

335 Front Street Demo Begins

Out With The Old…

Demo is officially underway at 335 Front Street. Although demo is technically destruction, it feels good to see the old materials removed in preparation for the brand new. Now that the slate is coming clean, it becomes easier to envision how great this house is going to look once the improvements are started. Below is a list of the high level demo activities captured in the photos:

  • Removal of siding. Replacement of the siding on the house is long over due and beyond salvaging. At some point, someone began painting the house and then stopped halfway through leaving the house 3 different colors.

  • Kitchen demo. The team removed the stove, sink, 8 feet of cabinets (upper and lower), and a drop ceiling. Yes, there was a drop ceiling in the kitchen. This is going to be a great improvement drywalling the ceiling and cleaning up the electrical mess that was left behind. The new kitchen will include a dishwasher and some additional counter space. The plan is to close up the window to the far right to make more room for cabinets and countertop space. We had discussed adding an island for additional storage, but due to the placement of the doors, it would impede the flow of the room.

  • New half bath and laundry room. The photo below is a room on the opposite side of the kitchen that will be converted into a half bath and laundry room. Previously the laundry was located on the second floor within a half bath. That space on the second floor will be converted into a full bath giving the house an additional full bath.

  • There are two additional rooms on the first floor that needed some minor demo. The hardwood floors are going to be refinished where possible. Upon demo, it was discovered that laminate flooring was glued to the hardwood in one of the rooms. Depending on how removal goes, this room may end up having to be carpeted. Fortunately, the room with the bump out on the first floor has wood flooring that is in pretty good shape and they will refinish nicely. This room would make a perfect office! The radiators, that were previously in each room throughout the house, have all been removed.

  • There hasn’t been any demo to the staircase. I just wanted to show a photo of how beautiful this staircase is. It is going to look absolutely amazing once it is refinished.

  • There are three large bedrooms on the 2nd floor of the house. The carpet is being removed and the walls and floors will be refinished.

  • The master bedroom. This large bedroom has the window bump out like the front room on the first floor. The demo for the master is not yet complete in these photos. The closet is being enlarged to be a walk-in and a door to the bathroom is being added to create an ensuite.

  • The 3rd floor bonus. There is an awesome and very spacious 3rd floor. We do not have plans to finish this area since the home will already have 3 bedrooms and 2 1/2 baths, but this could be a great opportunity for the new homeowner if there is a desire to finish the area or simply used for storage. Access to the 3rd floor is a walk up staircase for easy accessibility.

Demo is well underway! The new siding will start going up within the next week or so which will be a major transformation for the exterior. There is still demo, electrical, and HVAC work to be completed on the inside before building out, but things will quickly progress. Keep checking back to see the rehab progress at 335 Front Street. Ready to buy or sell a home? Great! Contact us at info@iHeartRehabbing.com

Commercial Due Diligence Period

I am currently in the midst of a deal that I am very excited about! Upon settlement, I will have control of a building that is in excess of 217,000 sqft with strong positive cashflow at approximately 80% occupancy. The building is used as a dry storage facility. It does not have any climate control, so the merchandise contained within the building cannot be prone to freezing.

The ultimate plan is to redevelop the property as mixed use residential, office, retail, etc… The building is three stories high and zoned as CBD (Commercial Business District). This is the ideal zoning which will allow the first floor to be comprised of office space and retail allowing the second and third floors to be residential. There is going to be quite a bit of work ahead once we reach closing. My plan is to take ownership and then take a few months to stabilize and get my bearings around the existing revenue generating businesses.

The structure itself is red brick, steel, and concrete with old pine wood flooring. It was used as a manufacturing facility for many years before being converted into the current use. The building materials lend themselves as the perfect canvas for some very unique and elegant feeling apartments. I can easily envision spaces with large industrial style windows, fourteen foot ceilings, exposed brick walls, wood floors, and industrial style HVAC systems. The layout allows for an abundance of light. I feel that the floor plan design could be a little tricky, but I have confidence that a good architect and designer could determine the be utilization of space without sacrificing the historical charm of the building. Of course, I do have a contingency plan of continuing / growing existing storage functions in the event that the redevelopment plans become too cumbersome of a hurdle.

IMG_5360.HEIC (1)

Photo of the inside of the building

Before any of the design plans can get underway, I need to get to closing and ensure that I am making a solid business investment. below are some of the things that I am gathering throughout the course of due diligence.

Contracts:

– Elevator maintenance 

– Snow removal

– Security deposits

– Roof maintenance 

– Trash removal

– Test control

– Hazardous waste removal service

– LP (liquid propane) service


It is extremely important to review any contracts that are currently in place because they will most likely come with the sale of the building; unless there is language stating that they are non-transferrable or contain some sort of cancellation clause. You do not want to get stuck with a bad contract or one that you can’t live with. It is important to review these contracts before the expiration of your due diligence period so that you can negotiate any disagreeable terms with the seller.

IMG_5350.HEIC (1)

Exposed brick walls and natural light

Building / business documents to ask for:

– Leases / operating agreements

– Roof warranty

– Mechanical issues

– Elevator permits

– Environmental consulting (environmental discovery)

– Building and fire code violations (get from municipality)

– Building permits 

– Financial records (ie. aging reports)

– Insurance and declarations page

It is always a good idea to ask for more than what you think that you will need. Carefully review all of the leases for any kind of cancellation clauses, tax agreements, or rent restrictions that may impact your plans following the acquisition. One of the documents listed includes the roof warranty. Was the roof recently installed? If so, it is most likely under some kind of warranty. Make sure that you are persistent with getting this information because roof issues can lead to some extremely crippling expenses.

Aging reports are helpful to gain insight on whether the rents are being paid and which tenants may be trouble for you in the future. Unfortunately, you can’t always trust the seller of a property to provide you with accurate information. Additionally, if you are financing the purchase of the building, then your lender may require you to provide rent payment history reporting. Speaking of financing, ensure that you have a complete list of everything that the lender will need in order to close on the building. You will not want to wait until the days leading up to closing to realize that you’re missing a vital document. This will delay closing and add unnecessary stress to the transaction.

The insurance and declaration page is something new that I have added to the list. The building involved in this particular deal has a very high insurable value. It has made obtaining a policy a little more complicated than usual. I am looking to obtain the contact information and insurance terms under the seller’s current policy. Perhaps the property is currently under insured, which will impact the overall P&L and the CAP. In any case you will always want to make sure that any property that you own is insured properly. Understating the value could have major implications in the event that you ever need to file a claim. You could end up getting nothing from a policy that you had been paying into for years if you’re not honest.

There is a lot involved with the due diligence period. The broker that you are working with should be knowledgeable in the areas of real estate that you are investing in. You may also wish to hire a real estate attorney to help review the leases, contracts, and overall deal. Regardless of who is on your team, I would recommend becoming educated yourself. This will help you to ask the right questions of your team and to ensure that they are qualified. I recommend reading the following book: The Due Diligence Handbook For Commercial Real Estate: A Proven System To Save Time, Money, Headaches And Create Value When Buying Commercial Real Estate. It is available on paper as well as audio and it is a very quick read. Investing an hour of your time could save you thousands of dollars on your investment.

I would love to hear from you about your real estate endeavors. What other information do you ask for during a due diligence period? What went right? What are some opportunities and areas that you will improve before making your next deal?

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